According to recent reports, Argentine President Cristina Fernandez is proposing a bill to nationalize the YPF oil company that is controlled by Spain’s Repsol.

Spain's Prime Minister Mariano Rajoy has said that he opposes the takeover, adding that Argentina's nationalization of its Spanish-controlled leading energy company is unjustifiable and that he will seek to stop it.

YPF is Argentina's largest company and has been under intense pressure from Fernandez' government to raise output. The YPF nationalization has made for an uncertain business climate in Argentina.

Extorre is an emerging gold and silver producer in Argentina, with its Cerro Moro, Puntudo and Don Sixto projects all in the discovery stage.

Cerro Moro is the company’s flagship gold-silver property, located in the mining-friendly Santa Cruz Province.

The company said it is important to note that there are significant differences in regulations, tradition, public importance and internal use of products between the oil and gas sector and the mining industry in Argentina. Public policy in one sector is not connected with the other.

Furthermore, Extorre said the Argentinean government initiative currently under discussion before Congress has been enacted only in connection with YPF, which has a long Argentinean history.

The company noted that YPF was state-owned from its inception in the early 1920s until the late 1990s, when it was privatized and a majority stake was sold to Repsol.

The current re-nationalization process of YPF has not been extended to other oil and gas companies operating in Argentina.

Extorre said there is no reported agenda in the popular press or, to its knowledge, to extend the nationalization process to any other company in the oil and gas sector in Argentina or to any other sector of the economy.

Additionally, the company said that several mining provinces have joined an alliance in support of mining with the acknowledgment of the Argentinean government, and none of the objectives of that alliance relate to any action or policy similar to the one taken in connection with YPF.

Extorre said the mining sector has also received explicit public support from the provinces and the Federal Government.

The company further said several other mining companies operating in Argentina have publicly commented on this situation in terms similar to Extorre's view.

Very recent discussions with potential financiers to provide capital for the potential development of Cerro Moro, it added, have indicated that the YPF action has not materially affected the finance ability of the project.

On April 2, Extorre announced the results of a Preliminary Economic Assessment (PEA-3) for a its potential mine development at Cerro Moro. The study was based on the November 2011, NI 43-101 mineral resource estimate.

That study modelled a nine year mine to produce 850,000 ounces gold and 47 million ounces silver. Extorre said the proposed mine would produce an average of 248,000 ounces gold equivalent per year for the first five years at a cash cost of US $303 per ounce gold equivalent.

Exploration with four drills continues at Cerro Moro, a program designed to increase the total resources on the property and to in-fill drill certain areas for mine planning purposes.

The company said results from current drilling will be released when available.

Mulroney, who has been chief operating officer since October 2011, replaces Eric Roth as president and CEO. Roth will remain as a director and consultant for Extorre, the company said.

With 25 years experience in project management and mine development, Mulroney is a qualified mining engineer. In addition to his engineering degree, Mulroney also has an MDP from the University of South Africa and a first class Mine Managers certificate.

Recently, he held positions including project director for Kula Gold (ASX:KGD) at the Woodlark project in PNG, and was project manager for Santa Barbara Mines in Western Australia.

"Trevor has shown tremendous capacity in leading the development team at Cerro Moro,” said co-chairmen Yale Simpson and Bryce Roxburgh in a statement.

"His focus on identifying the optimum project development path and meeting the corporate milestones required of him gave the Board the necessary confidence to fully endorse his promotion."

The gold miner noted that Mulroney’s immediate priorities will be to advance the Cerro Moro project studies beyond a preliminary economic assessment.

On April 2, Extorre announced the results of a preliminary economic assessment for potential mine development at Cerro Moro.

The study, which was based on a NI 43-101 mineral resource estimate in November, modelled a nine year mine to produce 850,000 gold ounces and 47 million ounces of silver.

This proposed mine would produce an average of 248,000 ounces gold equivalent per year for the first five years for a cash cost of US$303 per gold equivalent.

At Cerro Moro, exploration with four drills is ongoing. The program is designed to boost total resources and to in-fill some areas for mine planning.

Results from the current drilling will be released when available, the company added.

Monday morning, shares were up four percent at $6.22.

Projected precious metal production over the nine year life of the project is 848,000 ounces of gold and 47.2 million ounces of silver for gold equivalent production of 1.79 million ounces.

Gold contributes approximately 48 percent of the projected revenue stream, with silver contributing 52 percent, the company said.

A number of different production scenarios were considered for the PEA, ranging from 1,000 tonnes per day (tpd) to 1,500 tpd. Production scenarios of 1,150 tpd and 1,300 tpd  were selected as being the most potentially viable throughput rates with respect to maintaining a consistent gold-silver stream from the current mineral resource.

The economic modelling used a base case metal price assumption of US$1,320 per ounce for gold and US$26 per ounce for silver.

The 1,300 tpd throughput scenario is the preferred alternative due to higher metal production in the early years, the company said. Further studies will continue to evaluate mining and scheduling options to enhance project economics.

Extorre said that exploration drilling will continue with the objective of discovering further high-grade mineralization to replace lower-grade material later in the production profile. Results from current drilling will be released as they are received, Extorre said.

The PEA contemplates using a combination of open pit and underground mining methods, and is based on the November 2011 mineral resource estimate prepared by Cube Consulting.

Extorre said that average production for the first five years at a 1,300 tpd throughput is seen at 248,036 gold equivalent ounces per year, comprising gold production of 123,017 ounces per year plus silver production of 6.251 million ounces per year.

In this scenario, the mine has a 24-month payback period and pretax internal rate of return of 63 percent and a pretax net present value, at a five percent discount, of $737.4 million.

In the 1,150 tpd throughput scenario, avarage five-year production is seen at 216,876 gold equivalent ounces per year, comprising gold production of 109,985 ounces per year plus silver production of 5.344 million ounces per year.

With this throughput, payback is seen in 22 months with a pretax internal rate of return of 66 percent and a pretax net present value, at a five percent discount, of $723 million.

In the first five years, Extorre said that average mine site cash costs are seen at $303 per ounce gold at 1,300 tpd, and $304 per ounce gold at 1,150 tpd.

Initial capital expenditures for the 1,300 tpd and 1,150 tpd scenarios are estimated at $284 million and $257 million, including refundable VAT, respectively.

Operating costs for open pit mining increased to $2.46 per tonne and $2.39 per tonne for the 1,300 tpd and 1,150 tpd scenarios, respectively, in response to increased fuel, local labour costs and the effect of inflation on other costs, the company said.

Average mine site cash costs during the first five years of commercial production are projected to be $304 per gold equivalent ounce and $313 per gold equivalent ounce for the 1,300 tpd and 1,150 tpd throughput rates, respectively.

Over the mine's projected nine-year life, average life of mine production at 1,300 tpd was pegged at 199,359 gold equivalent ounces per year, comprising gold production of 94,270 ounces per year plus silver production of 5.254 million ounces per year.

At a throughput of 1,150 tpd, life-of-mine gold equivalent production was seen at 182,650 ounces per year during the years of active mining, comprising gold production of 86,888 ounces per year plus silver production of 4.788 million ounces per year.

Extorre's principal assets comprise C$37 million in cash and the Cerro Moro, Puntudo, and Falcon projects in Argentina.

Detailed engineering and development planning continue at Cerro Moro and an updated environmental impact assessment is expected to be lodged with mining authorities in the next few months.

The November 2011 resource estimate for Cerro Morro gives indicated resources of 1.35 million ounces gold equivalent, comprising 2.42 million tonnes (Mt) at 7.4 grams per tonne (g/t) gold and 498 g/t silver, for a gold equivalent grade of 17.4 g/t.

In the inferred category, the new estimate consists of 1.05 million ounces gold equivalent, comprising 4.74 Mt at 3.5 g/t gold and 172 g/t silver for a gold equivalent grade of 6.9 g/t gold.

The company has agreed to sell 3.53 million common shares at a price of C$7.10 each, for total proceeds of $25.06 million.

The new funds will be used for exploration and development of the company's mineral projects in Argentina, and for general working capital purposes.

In connection with this offering, the underwriter will receive a cash commission of five percent of the gross proceeds raised, Extorre said.

The deal is expected to close around March 15, subject to regulatory approvals.

Earlier this week, Extorre said it intersected more high-grade drill results at its Cerro Moro project in the Santa Cruz province of Argentina, particularly on the Zoe target.

Significant results from the 36 in-fill and step-out drill holes that the company completed at Zoe include MD1434A, which intersected 2.5 metres grading 41.4 grams per tonne (g/t) gold and 2,234 g/t silver, including 108.1g/t gold and 5,812 g/t silver over 0.35 metres.

Extorre has scheduled the release of its updated preliminary economic assessment (PEA) for March 31. The PEA will include mineral resource estimates for the Escondida-Zoe, Loma Escondida, Gabriela, Nini-Esperanza, Carla and Deborah mineralized zones.

The latest PEA from August, which was based on a resource estimate from April that did not include results from the Zoe discovery, indicated a proposed mine production plan of 1,000 tonnes per day for a total of 206,300 ounces of gold equivalent per year for the first three years of an 8.25 year life, at a cash cost of US$236 per ounce of gold equivalent.

Four rigs remain active at Cerro Moro, devoted to both new resource and mine development-related drilling at the property. At Zoe, infill drilling is continuing to convert the inferred resources to the indicated category.

Meanwhile, discovery-stage drilling at the Zoe East, Tres Lomas, Mosquito, Alejandra, and Carlita targets is progressing.

Some of the holes represent potential extensions to the NI 43-101 compliant resource estimate from November of this year, the company said.

As of early November, indicated resources at Cerro Moro stood at 1.35 million ounces gold equivalent, comprising 2.42 million tonnes (Mt) at 7.4 grams per tonne (g/t) gold and 498 g/t silver, for a gold equivalent grade of 17.4 g/t. In the inferred category, resources amount to 1.05 million ounces gold equivalent, comprising 4.74 Mt at 3.5 g/t gold and 172 g/t silver for a gold equivalent grade of 6.9 g/t gold.

Extorre said last month that 76 percent of the new indicated resource is at a gold equivalent grade above 30 g/t, a grade considered "exceptional" by industry standards. The silver content of the deposit remains high, and accounts for approximately 55 percent by value of the indicated resource, based on a silver to gold ratio of 50:1.

Highlights from the latest drill results at the Zoe discovery include 11.15 metres at 124.5 grams per tonne (g/t) of gold equivalent, including 0.65 metres at 1,247.2 g/t gold equivalent in hole MD1391.

Other notable results included: hole MD1405 with 4.60 metres of 96.0 g/t gold equivalent, including 0.80 metres of 372.5 g/t gold equivalent; hole MD1411 with 3.55 metres of 89.2 g/t gold equivalent including 0.32 metres at 352.0 g/t gold equivalent; hole MD1429 with 2.47 metres at 103.9 g/t gold equivalent, including 0.66 metres at 350.2 g/t gold equivalent; and hole MD1433 with 9.00 metres at 6.5 g/t gold equivalent, including 1.4 metres at 21.3  g/t gold equivalent.

The company said the gold equivalent grade is calculated by dividing silver grades by 50 and adding this figure to gold grade, assuming 100 percent metallurgical recovery.

Extorre's exploration manager, Matt Williams, said: "These results represent a mix of infill drilling to gain further confidence in the Zoe resource and step out drilling to test for extensions to the deposit.

"As Zoe represents 24% of the total indicated mineral resource and 37% of the inferred mineral resource for Cerro Moro, it remains our focus for two of the four drill rigs employed on the property.

“Of particular significance is the MD1433 drill intersection at a 420 metre vertical depth below surface, the deepest intercept to date of significant mineralization on the Cerro Moro property. The 420 metre depth, when compared to the other principal zones: 270 m at Escondida and 320 m at Gabriela, demonstrates the potential for expanding all of the veins at Cerro Moro to depth."

Of the two rigs at Zoe, one is testing for extensions at depth and the second is exploring for repetitions of the Zoe deposit up to three kilometres to the east.

The Escondida structure, on which the Zoe vein is located, has now been traced for over a strike length of 10 kilometres.

A third rig is currently drilling to provide geotechnical data for the open pit planning of pit wall angles and slope stability, which will feed into the revised preliminary economic assessment, scheduled for release in the first quarter 2012. The revised PEA will be based on the recent mineral resource estimate released in November, which was based on all drill data available as of October 10, including maiden contributions from four new mineralized zones: Zoe, Martina, Carla, and Nini.

The latest PEA from August, which was based on a resource estimate from April that did not include results from the Zoe discovery, indicated a proposed mine production plan of 1,000 tonnes per day for a total of 206,300 ounces of gold equivalent per year for the first three years of an 8.25 year life, at a cash cost of US$236 per ounce of gold equivalent.

The fourth and last drill rig continues to test new targets found by Extorre's geological team, the company said.
Elsewhere at Cerro Moro, a total of 65 drill holes have been completed on 22 targets, with a number of these holes intersecting veins with mineral assemblage considered favourable for high grades, the company said. Follow-up drilling is in progress to establish grade continuity of the discoveries.

Extorre, which holds around C$28 million in cash, also owns the Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina. Shares rose over 1% Wednesday morning, to trade at $9.59 as of 11:44am ET.

The market received the update favourably, with Extorre stock up over three percent at $7.96 in Toronto Thursday morning.

The new estimate gives indicated resources of 1.35 million ounces gold equivalent, comprising 2.42 million tonnes (Mt) at 7.4 grams per tonne (g/t) gold and 498 g/t silver, for a gold equivalent grade of 17.4 g/t. In the inferred category, the new estimate gives 1.05 million ounces gold equivalent, comprising 4.74 Mt at 3.5 g/t gold and 172 g/t silver for a gold equivalent grade of 6.9 g/t gold.

Extorre said the rapid increase was is in large part due to the Zoe discovery, which contributed 61 percent of the new gold equivalent ounces.

The new resources will form the basis of an updated mining and economic study for the project scheduled for release during the first quarter of 2012, with the potential for mine development at a larger scale - of around 1,000 to 1,500 tonnes per day - Extorre said.

Extorre said that the new study will be at a confidence level sufficient for the board to make a financing and mine development decision.

The new resource estimate, undertaken by Cube Consulting, is based on all drill data available as of October 10 and includes maiden contributions from four new mineralized zones: Zoe, Martina, Carla, and Nini.

Extorre added that 76 percent of the new indicated resource is at a gold equivalent grade above 30 g/t, a grade considered "exceptional" by industry standards. The silver content of the deposit remains high, and accounts for approximately 55 percent by value of the indicated resource, based on a silver to gold ratio of 50:1.

Additional inferred resources of 1.05 million ounces gold equivalent are reported from the Escondida, Loma Escondida, Zoe, Martina, Carla, Gabriela, Esperanza and Deborah veins.

Exploration is continuing at the Cerro Moro project, where six drill rigs have been operating continuously. In November, Extorre will reduce the number of rigs to four, with three rigs continuing to delineate the Zoe deposit and potential extensions.

Zoe itself has been tested for 2.2 kilometres of strike so far, with significant mineralization delineated over a 1.1 kilometre long zone.

In a preliminary economic assessment issued in August, Extorre gave an indicated resource of 0.66 Mt at 19 g/t gold and 835 g/t silver from the high grade Escondida and Loma Escondida vein zones, plus lower grade indicated resources from the Gabriela vein - of 0.53 Mt at 2 g/t gold and 371 g/t silver - and inferred resources of 1.86 Mt at 3.0 g/t gold and 182 g/t silver from the Escondida, Loma Escondida, Gabriela, Esperanza, and Deborah veins.
Data from the Zoe, Martina, Carla and Esperanza veins were not included at the time.

Separately, in the wake of Argentina cutting subsidies for profitable industries such as mining and energy, Extorre said it does not currently foresee a material change on the investment outlook for its Cerro Moro project.

In late October, the recently-elected government in Argentina ordered energy and mining companies to cash in all their export revenue on the local foreign exchange market before distributing it either locally or overseas.

This overturns the previous benefits that exempted energy and mining firms from currency repatriation laws that apply to all other primary producers in the South American nation.

Argentina put the new rules into place to stem the tide of money flowing out of the country.

Mining companies active in Argentina include Xstrata (LON:XTA), Barrick Gold (TSE:ABX) (NYSE:ABX), Orocobre (TSE:ORL)(ASX:ORE) and Minera Andes (TSE:MAI) (OTCBB:MNEAF).

Extorre's Cerro Moro gold-silver project is located in the north-eastern Santa Cruz province within the emergent Deseado Massif gold-silver mining district, approximately 70 kilometers southwest of the regional centre and port of Puerto Deseado.

The Cerro Moro property is covered by 175 square kilometers of mining concessions.

Extorre said the new estimate will also include contributions from the recent discoveries at the Martina, Carla, and Esperanza-Nini zones, in addition to Zoe.

Highlights from the latest Zoe target results included 3.0 metres grading 18.9 grams per tonne (g/t) gold and 943 g/t silver (37.8 g/t gold equivalent), including 0.88 metres at 55.5 g/t gold and 2,655 g/t silver (108.6 g/t gold equivalent), in MD1345.

Meanwhile, hole MD1348 returned 3.65 metres of 17.3 g/t gold and 2,314 g/t silver (63.6 g/t gold equivalent), including 116.8 g/t gold and 16,068 g/t silver (438.2 g/t gold equivalent) over 0.34 metres, while hole MD1351 found 39.1 g/t gold and 2,231 g/t silver (83.7 g/t gold equivalent) over 2.02 metres, including 0.51 metres at 113.6 g/t gold and 5,250 g/t silver (218.6 g/t gold equivalent).

Drilling continues at Zoe to further delineate the zone and its potential extensions. The Zoe structure has so far been tested for 2.2 kilometres of strike, with significant mineralization delineated over 1.1 kilometres, Extorre said.

A total of 119 holes have been completed since the zone's discovery in March, with results from 19 new holes still pending.

Other notable assays from the 33 holes reported today included 7.7 metres at 10.1 g/t gold and 3,285 g/t silver (75.8 g/t gold equivalent), including 53 g/t gold and 17,297 g/t silver (399.0 g/t gold equivalent) over 1.4 metres in hole MD1362.

Hole MD1372 also intersected 15.8 g/t gold and 1,494 g/t silver (45.7 g/t gold equivalent) over 2.55 metres, including 0.43 metres at 69.1 g/t gold and 4,932 g/t silver (167.7 g/t gold equivalent).

Independent consulting group Cube Consulting, Australia will be performing the new estimate, which is expected to be available early November 2011.

As of April last year, Cerro Moro was estimated to have 662,440 ounces of gold equivalent in the indicated category, as well as inferred resources of 430,880 ounces of gold equivalent.

Aside from Cerro Moro, Extorre’s assets comprise of the Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina.

A new resource estimate for Cerro is expected for release in October, and will include results from discoveries at the Martina, Carla, Esperanza-Nini, and Zoe zones, the company said. Drilling to complete the estimate has now been completed.

Recent assays from the 109 holes completed to date at the Zoe structure include 2.0 metres grading 13.0 grams per tonne (g/t) gold and 457.6 g/t silver in hole MD1300, including 0.31 metres of 80.3 g/t gold and 2,566 g/t silver.

Hole MD1304 returned 2.39 metres grading 6.8 g/t gold and 1,622 g/t silver, including 0.58 metres at 17.0 g/t gold and 4,255 g/t silver.

Meanwhile, assays from hole MD1315, also on the Zoe formation, returned 0.75 metres at 32.0 g/t gold and 1,605 g/t silver, including 0.45 metres at 52.7 g/t gold and 2,624 g/t silver, while hole MD1317 found 18.6 g/t gold and 198 g/t silver over 5.2 metres, including 1.36 metres grading 68.7 g/t gold and 601 g/t silver.

Results from an additional 34 holes are currently in the core cutting stage of processing, Extorre said, and are expected for completion in October.

Exploration manager, Matt Williams commented: "Drilling during the last two months has concentrated on extensions and infill at Zoe in preparation for the revised resource statement.

"Although the Zoe structure was intersected in the majority of the holes the intercepts are interpreted to potentially be above the high grade zone portion of the system."

Five drill rigs will now remain at the Cerro Moro property, three of which will continue drilling at the Zoe zone, testing the deeper targets of the area and the eastern extensions.

As of April last year, Cerro Moro was estimated to have 662,440 ounces of gold equivalent in the indicated category, as well as inferred resources of 430,880 ounces of gold equivalent.

Aside from Cerro Moro, Extorre’s assets comprise of the Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina.

Since listing on the Toronto Stock Exchange in May, the company's stock has risen over 11%. Inactive in morning trading, Extorre closed on Friday at $10.59.

The new holes were drilled in the Renaldo area, and results indicate the presence of a mineralized body, approximately 750 metres long, which remains open to the southeast, the company said.

Assays from the drill program found 3.8 metres of 2,154 g/t silver and 3.34 g/t gold, including 0.95 metres of 8,516 g/t silver and 9.4 g/t gold, in hole RD0020A, in the La Negra structure.

Other notable results included 5.0 metres of 236 g/t silver and 0.39 g/t gold, including 3.86 metres grading 300 g/t silver and 0.42 g/t gold, from hole RD0026, also at La Negra.

From hole RD0032, on the La Marocha structure to the west, assays returned 32 g/t silver and 1.11 g/t gold over 9.4 metres, including 5.65 metres grading 46 g/t silver and 1.61 g/t gold. The hole was one of the best reported to date on the structure, but further work is required to look into extensions of this mineralization, Extorre said.

"We are very pleased with the results from this being our first drill campaign on the Renaldo Area," said chief geologist, Glen van Kerkvoort.

"The primary focus of the company continues to be at Cerro Moro but given the technical depth of our exploration team, we will continue to explore our regional projects for the next high grade gold-silver discovery."

Indeed, step back drilling on the La Negra mineralization is scheduled, as evidence suggests there could be another mineralized zone further to the southeast. The October drilling program will define the limits of the mineralization, and test additional targets, the company said.

"It will be important for us to establish the ultimate potential of the property, not just the immediate potential of the Renaldo Area discovery," van Kerkvoort added.

Extorre is a Canadian company, whose properties include the Cerro Morro, Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina.

The net present value of the Cerro Morro project is forecast at $581 million and the pre-tax internal rate of return is estimated at 89.3%, for a mine producing an average of 206,300 ounces gold equivalent per year for the first 3 years, at a cash cost of $US236/ounce gold equivalent.

The new PEA increased the mining and processing rate of the property to 1,000 tonnes of ore per day (tpd), up 33% from the original estimate of 750 tpd.

Open pit production is expected to reach 1.69 million tonnes, up from the October 2010 estimate of 903,000 tonnes, while ore produced underground remains relatively unchanged from its original estimate - approximately 1.04 million tonnes.

The Vancouver, B.C.-based company expects the same 95% gold recovery, totaling 494,700 ounces recovered over an 8.25 year mine life.

While it has dropped its silver recovery down to 87.4% from the original 90%, Extorre said is now also expects recovery of approximately 26.6 million ounces of silver.

The updated assessment also involves increased metal prices, to US $1,320 per ounce of gold, and US $26 per ounce of silver - formerly US $950 per ounce of gold and US $16 per ounce of silver - and added that mining on the property will now cover all ore zones using both open pit and underground methods.

This second PEA, however, does not include mining from the recently discovered Zoe vein, or potential resources from the Martina, Carla, and Esperanza veins. But, it does include drilling completed up to January 2011 on the Escondida, Loma Escondida, and Gabriela zones. 

Capital costs for the mine have also increased, reflecting higher mill throughput, extra costs of a conventional tailings facility, larger mining fleet, and other industry-related cost escalations.

Extorre now expects direct costs for the initial project CAPEX to be $149.8 million, plus $25.7 million value added tax (VAT). The original PEA from October 2010 estimated this cost at $131 million, plus 21% VAT.

Costs for open pit and underground mining have dropped to $2.15 per tonne and $45.91 per tonne, respectively. The original assessment had these costs at $3.40 per tonne for open pit mining and $50 per tonne for underground mining. Milling and processing costs have risen to $67 per tonne, up from $38 per tonne in the original PEA.

The company said it based this updated assessment on indicated resources of 660,000 tonnes at 19 grams per tonne (g/t) gold and 835 g/t silver at the Escondida and Loma Escondida zones, and indicated resources of 530,000 tonnes at 2.0 g/t gold and 371 g/t silver at the Gabriela vein.

Inferred resources used to build the assessment were from the Escondida, Loma Escondida, Gabriela, Esperanza, and Deborah veins, and totaled 1.86 million tonnes at 3.0 g/t gold and 182 g/t silver.

In April 2011, a mineral resource estimate for the whole Cerro Moro project found 443,000 ounces of gold and 24.2 million ounces of silver in the indicated category, and 178,000 ounces of gold and 10.8 million ounces of silver in the inferred category.

Currently, Extorre has six drill rigs at the Cerro Moro property, dedicated to drilling a new resource there, and evaluating the recent high-grade discovery at the Zoe vein.

Drilling will also continue to test new targets on the Santa Cruz Regional prospect, to begin in the second half of 2011.

Extorre said it plans to release a new mineral resource estimate in the fourth quarter of 2011, which will include maiden resources for the Zoe, Carla, Martina, and Esperanza Northwest-Nini regions.

In-line with the TSX metals and mining sector, which has fallen 3.3% this morning, Extorre's stock slipped 3.2% to trade at $12.16 per share.

The latest results found extensions to known mineralization at Escondida, Gabriela and Esperanza-Nini, while infill drilling returned encouraging finds at the Martina and Carla prospects, in addition to reconaissance drilling at the Deborah, Agostina, Michelle prospects, and more. The results did not include drilling from the recent Zoe discovery.

Highlights include 7.37 metres of 23.4 grams per tonne (g/t) of gold equivalent, including 0.76 metres at 51.8 g/t gold equivalent and 1.46 metres at 63.4 g/t gold equivalent in hole MD1254 at the Gabriela vein.

Another hole at Gabriela, MD1265, returned 4.5 metres at 24.6 g/t gold equivalent, including 2 metres of 49.8 g/t gold equivalent.

Other notable results include 10 metres at 28.3 g/t gold equivalent in hole MD1261 at the Carla vein, including 2.05 metres of 103.2 g/t gold equivalent; 5 metres of 15.3 g/t gold equivalent, including 0.8 metres at 73.2 g/t gold equivalent in hole M1211 at the Esperanza vein; and 0.70 metres of 97.4 g/t gold equivalent in hole MD1174 at the Agostina vein.

In addition, at the Martina vein, hole MD1159B intersected 0.9 metres of 18.5 g/t gold equivalent, including 0.3 metres of 43.4 g/t gold equivalent.

“Drilling the extensions of the known veins at Cerro Moro has successfully expanded multiple areas of mineralization that with further drilling could lead to additional resources on the property," said exploration manager, Matt Williams.

"Importantly, this drilling demonstrates that very high grades are not confined to a particular vein or site on the property.

“The Cerro Moro vein field is extensive, covering an area of +100 square kilometres. Our geologists assign priority rankings to the various regional targets, a process that ranked the Zoe vein as #11. With our recent success we have reassigned priorities and placed five rigs on the Zoe discovery.

"We will leave one rig on the regional targets as there is scope for additional significant discoveries on the property.”

An updated resource estimate is expected on the property in the fourth quarter, which will include the high grade Zoe vein, as well as most of the veins from drilling reported today, the company said.

As of April last year, Cerro Moro was estimated to have 662,440 ounces of gold equivalent in the indicated category, as well as inferred resources of 430,880 ounces of gold equivalent.

Aside from Cerro Moro, Extorre’s assets comprise of the Puntudo and Don Sixto projects, and other mineral exploration properties in Argentina.

The company issued 2.4 million common shares at a price of $10.50 each. The offering was conducted by a syndicate of underwriters, who received a cash commission, as well as broker warrants. 

The proceeds from the financing will be used to explore and develop the company's mineral projects in Argentina. 

In late June, Extorre announced it expanded the scope of its economic study for the company's Cerro Moro project in Argentina, including a larger production scenario to reflect recent drilling success and the increasing gold and silver inventory on the property.

The preliminary economic assessment (PEA) study is due out in the middle of July, the company said, and will be categorised as a PEA instead of a pre-feasibility study (PFS) to allow for the inclusion of additional mineralized zones, with a portion of the resource now being inferred, as opposed to higher confidence categories.

The company chose to do this as prefeasibility studies can only be followed by another of the same kind, or a feasibility study, and the recent Zoe find at the property would thus have to be fully drilled off to the "indicated" resource category before Extorre could undertake a PFS - potentially taking up to one year.

The preliminary economic assessment (PEA) study is due out in the middle of July, the company said, and will be categorised as a PEA instead of a pre-feasibility study (PFS) to allow for the inclusion of additional mineralized zones, with a portion of the resource now being inferred, as opposed to higher confidence categories.

The company chose to do this as prefeasibility studies can only be followed by another of the same kind, or a feasibility study, and the recent Zoe find at the property would thus have to be fully drilled off to the "indicated" resource category before Extorre could undertake a PFS - potentially taking up to one year.

Extorre said the daily throughput levels being modelled in the study will be both 750 and 1,000 tonnes per day. In the last report from October last year, only the 750 tonne per day scenario was evaluated.

The upcoming report will also use a silver/gold ratio of 50:1, as opposed to the 60:1 ratio used in the earlier study, while gold and silver prices used will be US$1,320 and US$26 per ounce, respectively.

The company said that a new PEA based on a further 50% production expansion scenario is planned before year-end, and will include the recent Zoe discovery, as well as a number of additional veins not included currently.

In June, Extorre announced a $25 million bought deal financing, which allows it to maintain its drill program through the remainder of the year with six rigs, of which two are infill drilling the Zoe find.

Last April, Cerro Moro had indicated resources of 662,440 ounces of gold equivalent and inferred resources of 430,880 ounces of gold equivalent. The latest PEA in October estimated average production of 144,400 ounces gold equivalent per year from the project during the first five year of operations, at a cash cost of US$185 per ounce.

The Puntudo property is located just south of Coeur d'Alene Mines and Mirasol Resources' Joaquin silver project, and is also 200 kilometres west of Extorre's own Cerro Moro project.

With 32 drill holes completed to date at Puntudo, Extorre has reported results for the first 15 today. The company said that mineralization intersected in the holes show the potential strike extension of the La Negra and La Morocha veins from the Joaquin project to the south - onto the northern boundary  of Extorre's Puntudo property.

Highlights from drilling included 42.3 metres at 16 grams per tonne (g/t) silver and 0.60 g/t gold in hole RD0001 on the La Morocha structure, including 6.9 metres at 32 g/t silver and 1.01 g/t gold.

Meanwhile, on the La Negra vein, hole RD0004 returned 3.0 metres at 695 g/t silver and 0.66 g/t gold; and hole RD0015 intersected 9.0 metres at 211 g/t silver and 1.19 g/t gold, including 5.71 metres at 320 g/t silver and 1.82 g/t gold.

The site of the new mineralization, termed the Renaldo Prospect, is located on the northeast side of the company's 29,500 hectare Puntudo property.

“There is a saying in the mining business that the best place to find mineralization is alongside a known deposit," said Extorre's chief geologist, Glen van Kerkvoort.

"That has certainly been the case for our Renaldo Prospect. Boosted by the success of the Couer d’Alene and Mirasol discovery to the north we were able to fast track the discovery process at Renaldo.

"We are encouraged by the fact that Coeur d’Alene has notified Mirasol of its intention to proceed with a Bankable Feasibility Study on Joaquin project."

Indeed, the adjacent Joaquin property has an NI 43-101 compliant resource of 19.6 million ounces of silver in the indicated category and 47.9 million ounces of silver in the inferred category.

The company said the main focus of drilling to date at Puntudo has been the south extension of the La Negra vein, but roughly half of the total Joaquin resource is derived from the La Morocha structure, and with the encouraging result from hole RD001, Extorre has now initiated testing of the La Morocha trend.

Extorre also said that additional targets in the Renaldo area, including the intersection of the La Morocha and La Negra structural trends have been identified for future drilling.

Notable intersections included 8.00 metres at 84 grams per tonne (g/t) gold and 1,332 g/t silver, or 35.0 g/t gold equivalent in hole MD1220, including 4.15 metres at 15.2 g/t gold and 2,419 g/t silver, or 63.6 g/t gold equivalent.

Other significant results included hole MD1234, which intersected 2.00 metres at 36.3 g/t gold and 1,858 g/t silver, including 0.90 metres at 63.5 g/t gold and 3,135 g/t silver; and hole MD1253, which returned 2.00 metres at 37.0 g/t gold and 1,924 g/t silver, including 0.90 metres at 80.4 g/t gold and 4,023 g/t silver.

The company said that a total of 34 diamond drill holes now define the Zoe structure over a strike length of roughly 1.5 kilometres, one kilometre of which shows high grade gold-silver mineralization that is peripheral to a "central, bonanza grade zone".

"As with the Martina and Escondida Far West zones located west of Zoe, we are finding the near surface mineralization is generally significantly lower grade than what is found at depth," said Extorre's project manager, Fernando Chacon.

"We will therefore begin step back drilling to test for high grade mineralization at more favourable depths."

Indeed, management said it is considering moving two drill rigs to Cerro Moro from the company's other Puntudo project, which is located around 220 kilometres to the west. The move is planned for mid-June.

Of the 34 holes completed to date at the Zoe discovery, 22 have now been publicly released. Currently, there are four rigs operating at Cerro Moro, with three at the Zoe target.

Last April, the company announced that Cerro Moro had estimated indicated resources of 357,000 ounces of gold and 15.3 million ounces of silver, or 612, 000 ounces of gold equivalent, plus inferred resources of 190,000 ounces of gold and 12.0 million ounces of silver.

A preliminary economic assessment on the project last October also highlighted the robust economics of Cerro Moro, as the mine is expected to produce an average of 133,500 ounces of gold equivalent during its first five years of operations, at a cash cost of just US$201 per ounce.

The environmental study was submitted to the government of Santa Cruz, Argentina, in September last year.

The formal approval, together with the receipt of the pre-feasibility study expected in June, will allow Extorre to proceed with advanced engineering and mine development at the property.

"The successful permitting of the Cerro Moro gold-silver mine represents an important milestone for Extorre, and is the first step in what we expect will be a straight-forward mine development," said president and CEO Eric Roth.

The company said that Cerro Moro's ideal location, in combination with its very high grade gold-silver veins, should allow Extorre to obtain near-term and low cash cost gold and silver production, from a "relatively modest" capital investment.

Indeed, according to a preliminary economic report last October, the project is expected to produce an average of 133,500 gold equivalent ounces per year during the first five years of operations, at a cash cost of just US$201 per ounce. Capex has been estimated at US$131 million.

"With our ongoing exploration success, including the recently announced high grade gold-silver discovery at Zoe, the company will now have an opportunity to evaluate the potential for expanding the scope and the life of the proposed mine," added Roth.

In April, the company announced the NI 43-101 compliant resource for the property, which identified 612,000 gold equivalent indicated ounces at an average grade of 32.3 g/t gold, plus an additional 390,000 inferred ounces.

Four drill rigs are currently working on site to expand the known resource; as such, an updated resource report is expected in the third quarter.

Separately, Extorre also announced today that it completed the purchase of the 14,000 hectare ranch that covers the principal vein zones at Cerro Moro, providing the company with full ownership of surface rights.

Canada-based Extorre owns a portfolio of exploration properties in Argentina, including the Cerro Morro and Don Sixto projects.

The diamond drill results are from ten of the 27 holes completed to date on the Zoe zone.

Highlights included 8.6 metres at 39.9 g/t gold and 4,056 g/t silver, or 107.5 g/t gold equivalent in hole MD1213, including 1.3 metres at 171.7 g/t gold and 14,321 g/t silver, or 410.4 g/t gold equivalent.

In addition, hole MD1224 intersected 3.48 metres at 60.7 g/t gold and 1,875 g/t silver, or 91.9 g/t gold equivalent, including 0.60 metres at 254.2 g/t gold and 5,170 g/t silver, or 340.4 g/t gold equivalent.

"The new results are clearly outstanding, and confirm the continuity of mineralization at the Zoe discovery," said co-chairman, Bryce Roxburgh.

"Our view is that Zoe has the potential to both significantly expand the scope of the mine development and extend the life of the project.

"Additional drilling is required, but Zoe is indeed a “game changer” for the project and we are encouraged that our geologist’s advice is that the geological structure is strong and persistent along trend."

Indeed, Roxburgh went on to say that the Zoe vein system represents another "blind from surface" discovery at Cerro Moro, and that its subtlety could spell the potential for other similar finds within the 200 square kilometre field at the project.

Other notable intersects from Zoe included 1.81 metres at 162.0 g/t gold and 2,316 g/t silver, or 200.6 g/t gold equivalent in hole MD1226, including 0.71 metres at 374.0 g/t gold and 3,869 g/t silver, or 438.5 g/t gold equivalent.

The company said the new results define these high grades over a 350 metre strike length, and to a vertical depth of up to 240 metres.

Currently, two drill rigs are continuing to step out along the 2 kilometre long Zoe target zone, and should the high grade pattern continue, Extorre said it would examine the possibility of open pit mining at Zoe - similar to what it is planned or the Escondida, Gabriela and Esperanza veins at the project.

Last month, the company announced an NI 43-101 compliant resource for Cerro Moro, which estimates 612,000 indicated ounces of gold equivalent at an average grade of 32.3 g/t, plus an additional 390,000 inferred ounces of gold equivalent.

In addition to the rigs operating at Cerro Moro, there are two more working at Extorre's Cerro Puntudo project, located just 200 kilometres west of Cerro Moro.

Highlights from the first three of 21 holes include 4.84 metres at 64.6 g/t gold and 7,530 g/t silver, including 1.36 metres at 227.3 g/t gold and 25,428 g/t silver, in hole MD1204. The intervals yield 190.1 g/t of gold equivalent and 651.1 g/t gold equivalent, respectively.

The company said that visual inspection of the core suggests that drilling has just entered the mineralized zone, and that mineralization continues at depth.

The Zoe discovery, interpreted to be some 2 kilometres in strike length, is situated on the Escondida structure, 2.5 kilometres east of the last known area of significant Escondida mineralization, known as the Martina shoot.

In addition to the bonanza grades seen in hole MD1204, Extorre said it also saw a dramatic increase in gold and silver grades in hole MD1196, which was a 40 metre step out of discovery hole MD1191.

MD1196 intersected 1.27 metres of 13.4 g/t gold and 1,750 g/t silver, or 42.6 g/t gold equivalent, including 0.75 metres of 21.9 g/t gold and 2,832 g/t silver, or 69.1 g/t gold equivalent.

"We have made another blind discovery of spectacular mineralization. The surface expression of Zoe is an outcrop that assays only 0.34 g/t gold and 115 g/t silver," said exploration manager, Mathew Williams.

Williams went on to say that the results support the company's decision to concentrate 50% of its drill rigs and team on the Zoe find. At present, two drill rigs are working on Zoe, with one focusing on 160-metre step outs, with the other drilling at 80 metre centres.

"Every effort will be made to ensure that this new discovery will be included in the revised resource scheduled for Q3 this year," added Williams.

In April last year, the company released an NI 43-101 compliant resource report for Cerro Moro, which estimated 357,000 ounces of gold and 15.3 million ounces of silver in the indicated category, plus 190,000 ounces of gold and 12.0 million ounces of silver in the inferred category.

A preliminary economic assessment for the project also projected a cash cost of US$201 per ounce of gold equivalent.

Aside from Cerro Moro, Extorre also holds the Don Sixto deposit, and a suite of mineral exploration properties in Argentina.

Union Domes, which is located 18 kilometres south of the company's Cerro Moro discovery, is a bulk tonnage gold-silver target, where Extorre has already completed eight diamond drill holes. Results are expected within the next four weeks, the company said.

Meanwhile, at Cerro Puntudo, which is located 220 kilometres west of Cerro Moro, the company is operating one drill rig, with a second rig due to arrive shortly. The drill program is testing for potential extensions to the high grade silver system on the Joaquin property to the north. Two holes have been completed to date.

Separately, Extorre said that it now owns 100% of the Cerro Puntudo property and other regional projects in the area, as Cerro Vanguardia (CVSA) chose not to exercise its back-in right on the claims. CVSA now retains only a 2% net smelter return.

Extorre’s Co-chairman, Yale Simpson, said the listing “will significantly enhance Extorre’s visibility in the U.S. investment community.”

As a result of the listing, Extorre will be delisting from the OTCQX. 

Extorre’s assets consists of $39 million in cash, the Cerro Morro and Don Sixto projects, and other mineral exploration properties in Argentina.

According to the company's 2010 NI 43-101 compliant mineral resource estimate for Cerro Moro, the property had indicated resources of 0.59 million tonnes at 18.9 g/t gold and 805 g/t silver and inferred resources of 1.97 million tonnes at 3.0 g/t gold and 190 g/t silver.

The company said that four of the five initial holes drilled, as part of the reconnaissance program, intercepted broad zones of gold-silver mineralization.

Highlights include hole FD004, which returned 53 metres at 1.12 g/t gold and 30 g/t silver, or a 1.62 g/t gold equivalent.

The Falcon project, which covers an area of 13,986 hectares, is located just 80 km to the northwest of Extorre’s existing Cerro Moro project, which has an estimated indicated resource of 612,000 ounces of gold equivalent at an average grade of 32.3 g/t.

Drilling to date at Falcon has focused on the Crest target, where initial drilling has delineated a broad zone of mineralization with a 400 metre strike length. Mineralization remains open in all directions and follow-up drilling is planned for next month, Extorre said.

“Falcon is an exciting new project with some analogies to a lithological controlled system such as deposits in the Ivanhoe mining district of northern Nevada,” said the company’s chief geologist, Glen Van Kerkvoort.

“We look forward to results from the next drilling program at Falcon whereby we expect to gain better information on the size and continuity of the gold mineralized zone.”

Falcon was optioned from Cerro Vanguardia S.A. (CVSA) along with the Puntudo, Verde and Azul properties. All of these properties are subject to a once only back-in right, whereby CVSA has the right to earn up to a 70% interest in the properties by paying Extorre for expenditures to date as well as Extorre’s share of development costs.

Extorre said that CVSA is required to decide whether or not to implement the back-in right next month. In the event that CVSA does not opt to back in, Extorre will retain 100% ownership and CVSA will retain a 2% net smelter royalty.

This morning the company reported on the final eleven holes drilled in 2010, confirming high grade and bonanza gold intersections from the Esperanza, Gabriela and Martina veins.

Among the most noteworthy intersects were 1.9 meters averaging 12.2 grams per tonne gold and 1,079 grams per tonne silver in drill hole MD1126 which was cut into the Esperanza Vein. 

Another hole, MD1127, drilled into the Martina Vein, returned 0.85 meters averaging an impressive 310 grams per tonne gold and 5,295 grams per tonne silver. 

The highlight from the Gabriela Vein was MD1052 which returned 4.46 meters averaging 10.3 grams per tonne gold and 1,440 grams per tonne silver, and included a bonanza intersect of 1.13 meters averaging 36.8 grams per tonne gold and 5,295 grams per tonne silver.

Eric Roth, Extorre’s President and CEO reported that the company has also kicked off a new, 100,000 meter drilling compaign to test for mineralization along strike and at depth the many veins under exploration.   Four rigs are now operating around the clock.

Roth also confirmed that a resource estimate for Martina, Gabriela and Esperanza would be deferred until the third quarter to accommodate additional drill results, but a pre-feasibility study on Cerro Morro was due to be completed by June.

"The latest Esperanza assays provide solid support for the presence of additional near surface gold-silver mineralization on the vein, particularly to the northwest of earlier drilling,” Roth continued.

“Given the new results we have deferred in-fill drilling of the vein until we have more thoroughly evaluated the +2 kilometre long strike of the vein structure. Follow up drilling will also focus on testing the vein below 80 metres.”

Extorre has already defined an indicated resource of 357,000 ounces of gold and 15.3 million ounces of silver at Cerro Moro, with an additional 190,000 ounces of gold and 12 million ounces of silver in the inferred category.

A Preliminary Economic Assessment (PEA) in October 2010 suggested the potential to develop a low cost gold mine producing 133,500 gold equivalent ounces per annum for the first five years.

The drilling, which took place at the Gabriela and Loma Escondida vein zones, was designed to upgrade inferred resources to the indicated category, as only indicated resources are to be included in the pre-feasibility study of the property, due to be completed by the second quarter.

Of the 46 drill holes completed, 24 returned significant results, said Extorre. Highlights include hole MD1066 at Gabriela, which intersected 4.8 metres at 12.4g/t gold and 1,603 g/t silver (39.1 g/t gold equivalent), including 0.79 m at 70.7 g/t gold  and 8,935 g/t silver (219.6 g/t gold equivalent).

At Loma, hole MD1073 returned 2.63 m at 14.8 g/t gold and 1,208 g/t silver (35.0 g/t gold equivalent), including 0.30 m at 81.5 g/t gold and 6,851 g/t silver (195.7 g/t gold equivalent).

Meanwhile, MD1087 intersected 0.77 m at 105.3 g/t gold and 1,592 g/t silver (131.8 g/t gold equivalent), including 0.35 m at 224.1 g/t gold and 2,748 g/t silver (269.9 g/t gold equivalent).

"The infill drill program has been successful in confirming continuity of high grade gold-silver mineralization in both the Loma Escondida and Gabriela vein zones," said president and CEO Eric Roth.

"These veins are very important as they will potentially provide high grade open pit ore to the Cerro Moro plant in the early production years. It is noteworthy that this batch of results includes the highest silver-gold grades obtained to date from the Gabriela vein."

The infill drill results from the Gabriela and Loma Escondida veins will form part of an updated mineral resource estimate, which will be included in the prefeasibility study, the company said.

"The completion of the infill drilling allows us to focus the four rigs on establishing the upside of the extensive Cerro Moro vein system. We expect to drill +5,000 metres per month through 2011, allowing us to test many targets that have had little or no drilling to date," added Roth.

In April, the property was estimated to have indicated resources of 357,000 oz. gold + 15.3 million oz. silver (612,000 oz. gold equivalent) , plus inferred resources of 190,000 oz. gold + 12.0 million oz. silver (390,000 oz. gold equivalent).

Aside from Cerro Moro, Extorre's assets comprise approximately $42 million in cash, the Don Sixto project, and other mineral exploration properties in Argentina.

Mining permits and approvals for the Cerro Moro mine are expected to be received by the end of the first quarter this year.

The company said that recent drilling has focused on a combination of discovery drilling on new targets and extensions to known mineralization, as well as infill drilling to upgrade the existing resource areas to the indicated category.

Highlights of the results from the discovery diamond drilling program on the Gabriela, Escondida, Martina and Loma Escondida zones, include hole MD1002 at Gabriela, which returned 0.39 metres at 200.9 g/t gold and 8,785 g/t silver; hole MD0940 at Escondida, which intersected 4.40m at 5.4 g/t gold and 668 g/t silver; 3.25m at 10.4 g/t gold and 788 g/t silver from hole MD0947 at Escondida and 1.10m at 6.2 g/t gold and 702 g/t silver from hole MD0951 at Escondida.

At Martina, hole MD0980 intersected 0.73m at 14.3 g/t gold and 10 g/t silver.

Infill drilling highlights from the Loma Escondida zone include hole MD1030, which intersected 0.34m at 74.5 g/t gold and 4,685 g/t silver; hole MD1036, which intersected 0.88m at 55.0 g/t gold and 2,408 g/t silver; hole MD1038 with 0.50m at 90.4 g/t gold and 6,344 g/t silver; and MD1046 with 40m at 74.2 g/t gold and 5,963 g/t silver.

"With the infill drilling program largely complete, the discovery program is now our highest priority. Up to 4 drill rigs are working on a 24 hours basis to establish additional resources on the property," said president and CEO Eric Roth.

"Drilling is focussing both on new targets such as the Martina and Lucia veins and extensions to existing resource areas at Escondida, Gabriela, and Loma Escondida. Separately, drilling to increase the resource on another vein named the Esperanza zone has now commenced."

Extorre said that it still has assay back log for some 100 drill holes and is building an onsite sample preparation facility to rectify the problem, scheduled for start up in February next year.

Separately, to satisfy the requirements for the Environmental Impact Assessment and the PEA, which is currently under review by Santa Cruz authorities, infrastructure drilling for water resources and plant site engineering was completed at Cerro Moro.

The company said the study will consider the development of an 8 year, 750 metric tons/day mine producing 133,500 ounces of gold equivalent annually for the first 5 years.

"The level of engineering requested by Extorre is to a level that will enable the project to proceed directly to a construction decision and detailed engineering," said Extorre CEO Eric Roth.

"As Extorre has already submitted an Environmental Impact Assessment report to Provincial authorities, the Board is optimistic that a decision to proceed with commercial development could be made by June 30, 2011."

Extorre said it remains committed to an aggressive discovery drilling program through 2011 and 2012, which, it is hoped, will increase the resource base, brining the added resources into consideration in the current mining plan.

The pre-feasibility study follows the preliminary economic assessment of the project, released in October, which indicated the potential for a low cost open pit/underground gold-silver mine. The initial Capex was estimated at US$131 million, with an after-tax IRR of 43.4%.

When Mineweb visited Extorre's gold project in Argentina's Patagonia region in October, the company's geologists were getting excited about drill intercepts on a new vein - the Lucia - in the north of the property, some 10km from the main area which had been drilled so far.  Visually the new cores looked extremely promising, but no assays were available yet so little could be said at the time.

Now the first drillhole assays from the Julia vein have been announced by the company, and while the results are patchy, as is the nature of these vein deposits, some exceedingly high values, particularly of silver, have certainly suggested this new vein is well worth considerably more work.

One of the six holes drilled to date intersected 5.15m at 5.9 g/t gold and 1,083 g/t silver (23.9 g/t gold equivalent) within which there was a true bonanza grade section grading 0.45m at 51.8 g/t gold and 10,987 g/t silver (234.9 g/t gold equivalent).  A second hole also intersected excellent silver and gold grades, while the other four all came up with promising gold and silver values - although nothing like the bonanza grades in the first two holes mentioned. (For a detailed tabulation of the grades in all six holes click here for a link to Extorre's press release)

Extorre currently classifies its project as a prospective gold mine and is already working on getting an operating mine up and running focused on the high grade Escondida vein system and veins running close to this and their extensions (including another silver-rich vein - the Gabriela), but with the recent surge in the silver price, with the gold:silver ratio moving much further towards silver, the company could actually end up generating more revenue from silver than gold. 

The high silver values from this new vein could add to the prospect of Cerro Moro becoming a silver-dominant property.  Indeed the company's co-Chairman, Bryce Roxburgh, says as much.  "The discovery of a second silver dominant vein in the northern sector of the Cerro Moro field (Gabriela was the first) has significant implications for the project. Historically, 40% of the project value lies with silver, yet with increasing silver prices and the identification of additional silver dominant veins, Cerro Moro has the potential to transition to a silver dominant deposit."

Whether this is actually good for the stock price remains to be seen though as gold projects have tended to carry a premium, so Extorre may want to hold on to its gold mine tag regardless.  However in terms of revenues, particularly if silver continues to outperform gold (and if both continue to rise), then these silver rich areas could provide a nice bonus for the putative precious metals miner.

As the company moves forward, with a prospective first production date of late 2012, it will continue drilling out a number of veins, but it is a question of prioritisation as the exploration area has many which are still untested.

With drilling on both the Gabriela Central and Loma Escondida zones now essentially complete Extorre plans to deploy three of its four drill rigs to define further gold and silver resources on the Cerro Moro exploration concession. The priority targets currently include the Lucia, Gabriela extensions, Esperanza, Carla and Martina zones. 

The company is working towards its next resource announcement in the second quarter of next year.  It last announced an Indicated resource of 612,000 ounces gold equivalent (590,000 t at 18.9 g/t gold and 805 g/t silver, for a gold equivalent grade of 32.3 g/t), plus an Inferred resource of 390,000 ounces gold equivalent (190,000 t at 3.0 g/t gold and 190 g/t silver, for a gold equivalent grade of 6.1 g/t gold).  The company President and CEO, Eric Roth, has gone on record as telling Mineweb they are now targeting a resource of 2 million ounces gold equivalent - it remains to be seen whether the company can reach that in its next resource announcement, but whether it does or not there should be a good positive increase on its existing figures which were announced in April this year.

The Lucia vein is the second silver-dominant vein discovery in the northern sector of the Cerro Moro field following Gabriela. Lucia is located approximately 10 km northeast of the high grade Escondida zone.

Highlights from two of the six holes include MD998, which intersected 5.15 metres at 5.8g/t gold and 1,083 g/t silver, including 0.45 metres at 51.8g/t gold and 10,987g/t silver. MD1003 intersected 0.4 metres at 5.1g/t gold and 1,247g/t silver.

“Historically, 40% of the project value lies with silver, yet with increasing silver prices and the identification of additional silver dominant veins, Cerro Moro has the potential to transition to a silver dominant deposit," said the company's co-chairman Bryce Roxburgh.

"The intersection of bonanza silver and gold values within the intercept quoted above for the first hole, MD998, of 0.45m at 51.8 g/t gold and 10,987 g/t silver clearly supports drill testing the entire length of the Lucia target to test for Escondida-style bonanza shoots.”

The target at Lucia is more than 2.5 km long, according to geophysical data. The vein occupies an interpreted boundary fault that separates a block of volcanic rocks from a sedimentary sequence, and it appears to the company to be a similar structure to the Escondida vein, which hosts 60% of the total currently reported Cerro Moro resource.

The company said it is currently drilling to test northwestern and southeastern extensions to the Lucia structural zone, as infill drilling to upgrade the existing resource at the Gabriela and Loma Escondida zones is now complete, and three of the four diamond drill rigs on site will now look to define new gold and silver resources at the project.

Priority targets will include the Lucia, Gabriela extensions, Esperanza, Carla and Martina zones. Extorre added it is still on track to release a new resource estimate in the second quarter of next year.

Canada-based Extorre was up 4.3% on Monday, trading at $6.78 as of 11:46am EST.